Existence and Magnitude of Health-related Externalities: Evidence from a Choice Experiment

Health-related external benefits are of potentially large importance for public policy. This paper investigates health-related external benefits using a stated-preference discrete-choice experiment framed in a health care context and including choice scenarios dened by six attributes related to the a recipient and the recipient's condition: communicability, severity, medical necessity, relationship to respondent, location, and amount of contribution requested. Subjects also completed a set of own-treatment scenarios and a values-orientation instrument. We find evidence of substantial health-related external benefits that vary as expected with the scenario attributes and subjects' value orientations. The results are consistent with a number of hypotheses offered by the general theoretical analysis of health-related externalities and the analysis of externalities specific to health care.externalities; altruism; health care financing; program evaluation

Physician Labour Supply in Canada: a Cohort Analysis

This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock.physician, labour supply, hours, cohorts

Geographic Equity in Hospital Utilization: Canadian Evidence Using a Concentration-Index Approach

Distance-related geographic barriers challenge the ability of health systems to allocate health care resources equitably according to need. The paper adapts the concentration-index approach, commonly used for measuring income-related equity, to assess distance-related equity in hospital utilization in the province of Ontario, Canada. The analysis is based on individual-level data from the Canadian Community Health Survey, which provides information on respondents’ hospital utilization, health status, demographic, socio-economic status and location, merged with data on Ontario hospitals, and a geo-coded measure of each respondent’s distance to the nearest general acute-care hospital. We find no evidence of a relationship between distance to the nearest hospital and either the probability of hospitalization or the annual number of hospital nights. Supplementary analyses provide insight into hypothesized pathways between distance and hospitalization. Although having a regular medical doctor is positively associated with distance to the nearest hospital, controlling for this does not affect the estimated distance-hospitalization relationship. Both the size and occupancy rate of the nearest hospital are correlated with distance and are strongly related to the probability of hospitalization, but again controlling for these factors did not affect the estimated relationship between hospital use and distance to the nearest hospital. We do, however, find a strong positive gradient between the probability of hospitalization and distance to the nearest large hospital. This gradient is driven by the fact that, for most of those far from a large hospital, the nearest hospital is small with a low occupancy rate. Calculation of the distance-related horizontal inequity index confirms no distance-related inequity in hospital utilization when distance is measured to the nearest hospital of any size; however, when distance is instead measured to the nearest large hospital, we observe large, pro-distance inequity. These distance-use relationships are not captured by traditional geographic measures based on measures of urbanization/ruralness.hospital utilization, equity, geography

Physician Labour Supply in Canada: a Cohort Analysis

This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock.physician, labour supply, hours, cohorts

Unhealthy Pressure: How Physician Pay Demands Put the Squeeze on Provincial Health-Care Budgets

In the 11 years since the Romanow Commission warned that the income of physicians was threatening to become a significant driver of Canadian health-care costs, doctors in this country proceeded to chalk up some of their most rapid gains in earnings since the implementation of medicare. Since 2000, the gap between what the average physician makes, and what the average fully employed Canadian worker earns, has diverged like never before. In the last decade, the average doctor went from earning three-and-a-half times the average Canadian worker’s salary, to earning nearly four-and-a-half times as much, a more than 25 per cent relative increase. In constant dollars, today’s average Canadian physician is earning about 30 per cent more than he or she was just a decade ago. All of this has occurred while physicians have actually provided slightly fewer services to patients. Since the implementation of medicare, the payment of doctors has been rather a matter of politics, as provinces became the ultimate paymasters for health-care personnel. The natural result was an ongoing competition between provinces and physicians for public support, each with its own claim to being the guardian of public health care. In the last two decades, however, doctors have succeeded in outmaneuvering governments, marshaling greater public support for higher pay for their work, even as provinces have been more often viewed as underfunding basic health care needs. There are signs that this may have finally gone too far: Ontario was recently able to freeze remuneration for doctors in a negotiated contract deal and Alberta shortly after imposed a unilateral settlement on its doctors after breaking off negotiations. Stories about “millionaire doctors” are now proliferating in the mainstream media and, as provinces across the countries struggle with deficits, the public’s sympathy appears to be shifting. There were periods, during the ’70s and ’90s, when governments were successful in holding back the growth in doctors’ fees, to the point where physicians saw their purchasing power shrink. If Canadians are now questioning where the priorities of doctors truly lie — whether its preserving health care or enriching themselves — the provinces can only gain more leverage in future negotiations with doctors. Physicians in the Canadian health-care system are entrusted with a special and protected role, and it behooves medical associations to bear in mind their additional responsibility to promote public health-care objectives. The current collective bargaining model has resulted in provinces pressured into buying healthcare peace by agreeing to continually ratchet up doctors’ pay. It is difficult to see how that can continue. It is time that doctors began working with policy-makers on a new model, one that puts less emphasis on profiting doctors, and more emphasis on promoting a sustainable health-care system for everyone

Physician Labour Supply in Canada: a Cohort Analysis

This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock

Preferences over the Fair Division of Goods: Information, Good, and Sample Effects in a Health Context

Greater recognition by economists of the influential role that concern for distributional equity exerts on decision making in a variety of economic contexts has spurred interest in empirical research on the public judgments of fair distribution. Using a stated-preference experimental design, this paper contributes to the growing literature on fair division by investigating the empirical support for each of five distributional principles — equal division among recipients, Rawlsian maximin, total benefit maximization, equal benefit for recipients, and allocation according to relative need among recipients — in the division of a fixed bundle of a good across settings that differ with respect to the good being allocated (a health care good — pills, and non-health care but still health-affecting good — apples) and the way that alternative possible divisions of the good are described (quantitative information only, verbal information only, and both). It also offers new evidence on sample effects (university sample vs. community samples) and how the aggregate ranking of principles is affected by alternative vote-scoring methods. We find important information effects. When presented with quantitative information only, support for the division to equalize benefit across recipients is consistent with that found in previous research; changing to verbal descriptions causes a notable shift in support among principles, especially between equal division of the goods and total benefit maximization. The judgments made when presented with both quantitative and verbal information match more closely those made with quantitative-only descriptions rather than verbal-only descriptions, suggesting that the quantitative information dominates. The information effects we observe are consistent with a lack of understanding among participants as to the relationship between the principles and the associated quantitative allocations. We also find modest good effects in the expected direction: the fair division of pills is tied more closely to benefit-related criterion than is the fair division of apples (even though both produce health benefits). We find evidence of only small differences between the university and community samples and important sex-information interactions.Distributive justice, equity, resource allocation, health care

Parallel Private Health Insurance in Australia: A Cautionary Tale and Lessons for Canada

Canada's restrictions on the role of private health insurance for publicly insured physician and hospital services are unique among countries with universal, publicly funded health care systems. Pressure is mounting in Canada, however, to loosen these restrictions and create a parallel system of private finance. Advocates argue that creation of a parallel system of private finance will ensure the sustainability of the public system (by reducing public cost pressures), improve access to the public system (e.g., by reducing wait times), and improve quality in the public system (through competition). Opponents of parallel private finance argue that it will create "two-tiered" medicine, increase costs, compromise equity and reduce quality and access to publicly financed health care as those with the financial means (and often the strongest voice) exit to private insurance. Australia provides a particularly promising case study for Canada regarding the dynamics of parallel systems of public and private finance. This paper examines Australia's experience with parallel finance for inpatient hospital services to provide insight regarding: (a) the effectiveness of a parallel system of private finance in reducing costs and wait times in the public system; (b) risk selection between the parallel public and private insurance sectors; (c) the financial redistribution associated with the introduction and maintenance of a parallel system of finance; and (d) the dynamics of the broader political economy associated with parallel systems of finance. Australia's experience provides a number of lessons for Canada, including: (1) the potential for cost savings through introduction or expansion of a parallel private sector is very limited; (2) the introduction or expansion of a parallel private finance is unlikely to reduce wait times in the publicly financed system; (3) there is no simple way to regulate private insurers to pursue public objectives; (4) it is impossible to create an independent, isolated parallel system of private finance — interactions between the public and private insurance sectors are complex and unavoidable; (5) quality plays a key role in driving the dynamics between the public and privately financed sectors; and (6) it is essential to articulate clear policy objectives for health care financing and to design public and private roles consistent with these objectives. Our overall conclusion is that the Australian experience provides a cautionary tale regarding the risks, costs and benefits of a parallel private system of health care finance.